A business is nothing without the people behind it, but within an organization, no matter the size of it, employee appraisal reviews are essential to driving performance in the rapidly changing environment of the industry your business is situated in.
However, while employee performance reviews can be critical to the success of their continued development, and therefore the continued development of your organization, it’s not a one size fits all approach. Appraisal systems must suit the needs of your organization, the outcomes you’re seeking to achieve, and the employees you are looking to support with these performance reviews.
We had the privilege of sitting down with Austin Sailors, Mark Putrus, and Ricky Turner, all seasoned experts in change management and innovative people practices, with a mix of small start-up and more established organizations, and we got the chance to draw on their knowledge to examine the practical strategies to redesign appraisal systems to drive performance.
One key insight from our recent discussions on employee appraisal systems was how feedback delivery can be impacted by traditional performance reviews. These reviews are typically conducted once a year, but for many employees, this long gap can be a hindrance to their development. Without timely feedback, employees eager to improve may find their growth stunted until their next appraisal. This highlights the need for more regular, relevant feedback to support continuous improvement.
In fact, as Fortune points out, 66% of employees are dissatisfied with their organization’s performance reviews, and 65% feel the assessments are not relevant to their roles. Another issue is that appraisals are traditionally self-reviews. While being able to analyze your own performance and where your shortcomings may be is a critical skill to have, not everyone possesses it, and nor do they possess it to the same degree as others. For an employee to meaningfully engage with their performance review, it may be helpful for some employees to garner support from their colleagues during the appraisal process.
The conversation also highlighted a potential issue with fairness during the performance review process, as it can be hindered by issues within administration. To improve employee appraisal systems, it’s essential to focus on what is fundamentally wrong with the process for the needs of your organization.
Another common issue of traditional performance reviews is the time they often take. An employee appraisal, while essential, practically, takes a lot of time and effort to complete, which can negatively impact the organization in terms of time taken away.
As part of the people team within an organization, we need to ask ourselves:
It’s recognized that organizations focused on being intentional about performance management have employees that are 4.2x more likely to outperform their peers concerning income and lower attrition rates. As such, it’s critical that the appraisal system an organization employs strategically supports their employees. A performance review should be a collaborative process that connects reviewing feedback directly back to the organization values. Not only should an effective employee appraisal system drive better performance, it should also build a winning culture and drive connection between everyone in the organization.
It’s crucial to take the different elements of a performance review into consideration when developing a new appraisal system, such as:
Lurk in the shadows and peel back the hide, as it’s essential to understand the purpose and intention behind all of these elements from their base principals before implementing them in practice.
Comparison is a prerequisite of employee appraisals, but pitting employees against each other during performance reviews can foster a negative Hunger Games-adjacent environment. They’ll quickly become aware that, in terms of performance, they don’t have to be the best, they just don’t have to be the worst person. Not only does this create trauma, but it also stifles growth. You need to examine: do you want a group of high performers, or do you want a high performing team?
It can be more beneficial and meaningful to view performance based on comparing the employee to their previous achievements. As a member of the people team, you should want to grow and develop your people based on them, for them, and where they personally want to develop professionally. By focusing on this approach to employee performance reviews, it changes the whole tone, tenor, and vocabulary of the review, making it more worthwhile and purposeful.
Furthermore, they should be compared against the set expectations they were hired against, the skills and competencies they were already bringing to the table, and in what direction these should be developing. This should support a much less biased approach to employee performance reviews and their development by looking at their growth and development within the organization, and should also helpfully highlight any issues with the onboarding process and ongoing communication struggles.
When making changes, even if the goal is to improve support, things will inevitably go wrong, so what are some key pitfalls to avoid in changing the employee appraisal process?
HR has a reputation for bringing in the same processes, just with a different name and a slightly different approach to measure data. Don’t waste valuable time and resources, especially for a process as essential to development as employee performance reviews, by deploying the same program with a different name. Make sure every change has value added and don’t implement new strategies for the sake of it.
Another practical way to support reducing mistakes in changes to employee performance reviews is to start by establishing the outcomes you want. In every organization, everyone brings a plethora of lived experiences to the table, good and bad, that have influenced them and made them biased. As such, it’s easier to support change to appraisal systems by identifying what outcome you want to achieve and bridge the gap with a solution that can meaningfully support achieving that.
Mark, Austin, and Ricky emphasise that to succeed in having more meaningful employee performance reviews could be through having more frequent conversations that have a looser structure to them, as this will allow you to examine how people are truly feeling and how their performance is developing.
It’s also essential to focus on fairness and transparency. These factors must be built into your employee appraisal strategy in order to support and engage with them effectively. It’s also essential to build the values of your organization into the performance review process at every stage, so it all comes back to the culture of your organization.
To watch the webinar in full, visit the Pando website, as well as explore more of our resources, including our latest e-book, Building Manager Buy-In for Competency-Based Performance. With Pando, we connect your growth and impact to drive performance in your organization.
